Get rich through planning and setting goals: money experts

A new financial year can be a time for taking stock, planning and doing something for your future. These tips can help.

Setting money goals to start a financial year is a powerful way to grow wealth, although some people’s aim for 2023-24 may simply be “avoid bankruptcy” as living costs soar.

Despite the pain of rising interest rates, food, fuel, insurance and energy prices, Australians are being urged to set themselves financial goals – short term and long term – and write them down.

CreationWealth senior financial adviser Andrew Zbik says writing down goals “makes sense” because of its psychological benefits.

“It’s the vision of where you want to be,” he says.

“Also write down your achievements for the last year – it’s very rewarding to see that you have achieved something, and it gives you a perspective of what you would want to do next.

“People are often fearful of goals because they fear the accountability.”

Here are five goals that are worthwhile adding to anyone’s plans for 2023-24 and beyond.

1. FINANCIAL CHECK-UP

If you don’t know where you stand now, it will be hard to map a path to future wealth.

Set a goal to go through your finances in July and find the savings that are often buried in peoples’ busy lifestyles.

Zbik says this can help people ensure their finances can cope with further jumps in housing costs and other expenses.

CreationWealth financial adviser Andrew Zbik says have a vision. Picture: John Appleyard

Moneysmart.gov.au spokesman Andrew Dadswell says starting the process is “often the hardest thing to do” but there are tools and calculators that can help people make informed decisions.

“One quick way to see if you can reduce your spending is to review your bank or credit card statements for the last two months … are there things you could review that you might be able to find a cheaper option for, like your phone plan?” he says.

2. TAX ATTACK

Tax season is here, and there is no better time to set tax-related goals for the current financial year.

H&R Block director of tax communications Mark Chapman says up to 45 per cent of Australians’ income disappears in tax so setting goals to minimise it makes perfect sense.

“There are numerous ways to legitimately do it,” he says.

People can set daily, weekly and monthly goals to record their working from home hours – now compulsory after Australian Taxation Office changes in March.

Chapman says short-term tax goals can include filling out a 12-week logbook of work-related motor vehicle use, setting up tax-deductible superannuation contributions and starting a file to keep digital records of receipts.

“Don’t worry about keeping paper copies, which tend to fade anyway,” he says.

3. INVEST FOR SUCCESS

Starting a savings account or investment account with regular contributions taken from wages can multiply wealth over time. If money is automatically transferred to investments before you have a chance to spend it, you won’t notice it missing.

Writing down investment goals, like all other money goals, is important.

“Otherwise they’ll go the way of all new resolutions – they will be forgotten about by the end of the first week of July,” Chapman says.

“If you write two or three crisp, concise financial goals – you don’t need to write down the detail – on a post-it or similar and stick it to the fridge, they’ll always be visible and will act as a reminder as you track through the year.”

4. EYE ON INSURANCE

Insurance premiums for everything have surged in recent times, with some policy costs jumping by 50 per cent, so have a goal to check you are not being ripped off. It may take a few hours but the savings can total hundreds of dollars a year.

Zbik says income protection insurance may need to be updated as wages climb higher. “When was the last time you looked at your personal insurance policies?” he says.

Moneysmart’s Dadswell says set a regular reminder to compare providers “as the little things can add up over time”.

5. LONG-TERM TARGETS

Do you want to retire before 60? Pay off your house within 15 years? Afford a big overseas holiday?

Longer-term goals are great to have too, because they can help you stay focused over years and decades.

Write down a few long-term goals and put them somewhere you can see – perhaps with a photo or two, so you are constantly reminded of what you want in the future.

Jono Castano, founder of Acero gym, says money goals help him stay focused.

MONEY GOALS CRUCIAL

Jono Castano, founder of Acero gym, sets himself money goals and says this is crucial for personal and business financial success.

“They give you a clear sense of direction and motivation, acting as a road map,” he says.

“Personally, money goals help me stay focused, disciplined and accountable.”

Castano says he sets himself goals around budgeting, continuous learning and paying off debts as quickly as possible.

“By allocating a portion of my income towards debt repayment, I can reduce interest costs and achieve financial freedom sooner,” he says.